Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Schedule 7 paragraph 40

Group relief modifications for partnership transfers

Schedule 7 paragraph 40 explains how group relief (set out in Schedule 16) is modified when it applies to certain transfers of chargeable interests into a partnership, including transfers caught by the anti-avoidance rules on partnership interest transfers.

• Group relief under Schedule 16 can apply to transfers of chargeable interests to a partnership (paragraph 13 transactions) and to chargeable transactions arising from anti-avoidance provisions on partnership interest transfers (paragraph 18 transactions), but with specific modifications.
• The clawback rules are adapted so that, instead of tracking whether the buyer leaves the seller's group, they track whether a partner who was a partner at the date of the original relieved transaction leaves the seller's corporate group.
• For clawback purposes, the relevant chargeable interest is one held by or on behalf of the partnership members — either acquired under the relieved transaction or derived from it — provided it has not since been acquired at market value in a chargeable transaction where group relief was available but not claimed.
• The amount subject to clawback is calculated by reference to the chargeable interest held by or on behalf of the partnership and the proportion in which the departing partner shares in the partnership's income profits at the time they leave the group.